Magazine article American Banker

Atlantic States Bankcard Rumored to Be on Block

Magazine article American Banker

Atlantic States Bankcard Rumored to Be on Block

Article excerpt

The buzz in the credit card industry is that the last major non-profit bank card processing association is up for sale.

Observers said they think that Atlantic States Bankcard Association, Raleigh, N.C., will soon be bought by a for-profit processor.

But top officials with Atlantic States, which provides bank card processing services to more than 150 institutions in south-eastern and Middle Atlantic states, denied the rumors.

J.D. Davis, Atlantic States' treasurer, said there has been speculation about a sale "on and off for about three years."

He added that he was not aware of any discussions going on currently.

A Credible Voice

But the rumors gained credibility recently when a top executive with a leading credit card processor, who requested anonymity, said his company is discussing acquisition of Atlantic States.

Such a sale would mark the end of an era for the credit card processing industry, which began when bank credit cards were introduced in the mid-1960s. For decades these nonprofit, multibank associations were dominant computer processors of credit card accounts.

But gradually, for-profit vendors have bought so many non-profit associations that the concept faces virtual extinction if Atlantic States is sold.

"I've heard that they're basically advertising themselves as up for sale," said Phil Sattler, president and chief executive of Credit Systems Inc., about Atlantic States.

Credit Systems is a for-profit processor in St. Louis owned by 11 institutions, including Boatmen's Bancshares Inc.

Not in the Market

Mr. Sattler added, however, that Credit Systems is not bidding to buy Atlantic States or any other processor.

According to The Nilson Report, an industry newsletter in Santa Monica, Calif., in 1992 Atlantic States handled computer processing for about 2. …

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